Macro Musings with David Beckworth Martha Gimbel on the Impact of AI and the Trade War on Labor Markets
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Dec 15, 2025 
Martha Gimbel, executive director and co-founder of the Budget Lab at Yale, shares her insights on the impact of AI and trade wars on labor markets. She discusses the troubling gap in BLS data and its implications for economic analysis. Gimbel highlights the slow adaptation to AI in workplaces and the uncertainties about which jobs are most at risk. She argues for the continued importance of foreign language learning despite AI advancements. Additionally, she breaks down the economic effects of tariffs and the demand for US treasuries in a shifting global landscape.
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AI Hype Meets Slow Labor Adoption
- Despite fast hype, generative AI has only existed a few years and shows little labor-market disruption so far.
- Adoption lags: firms and workers need time to learn productive uses before jobs change materially.
Early Data Shows Flat Labor Signals
- Empirical checks show little change in occupational mix or unemployment patterns since ChatGPT's release.
- Martha labels herself a 'technology-paced adaptation skeptic' rather than an AI skeptic.
Young Graduates Face Mixed Risks
- Some studies find narrow declines for very recent college grads in AI-exposed roles, but timing suggests macro weakness may explain much.
- Short-run employment drops could mix business-cycle effects with early AI adoption choices.